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One of Varic Company’s products goes through a glazing process. The company has observed glazing costs as follows over the last six weeks: Week...

Question:

One of Varic Company’s products goes through a glazing process. The company has observed glazing costs as follows over the last six weeks:

Week    Units Produced Total Glazing Cost

1                              8                              270 

2                              5                              200 

3                              10                           310 

4                              4                              190 

5                              6                              240 

6                              9                             290 

For planning purposes, the company’s management wants to know the amount of variable glazing cost per unit and the total fixed glazing cost per week.

Required:

1.            Using the High - low method, estimate the variable and fixed elements of the glazing cost.

2.            Express the cost data in (1) above in the form Y = a + bX.

3.            If the company processes seven units next week, what would be the expected total glazing cost?